Natural Resources Committee on Oct. 31st, 2011

[The Chair, Conservative, Leon Benoit]

Yes. Thank you, Mr. Jacob.

We go now to Mr. Trost, for up to five minutes.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Thank you, Mr. Chair.

Earlier it was noted that Canada has moved from the number one position in uranium production down the list a bit. We've heard about the regulatory issues and problems that could help the industry out, but I was wondering what the other particular reasons are for why Canada has moved down the list. Cigar Lake's coming into production should be helpful.

Both AREVA and Cameco invest outside of Canada. I know that AREVA has looked at Kazakhstan and that you're all over the world, and Cameco has also been putting some money into Australia. What are the reasons why your companies have chosen to invest outside of the country for uranium, rather than in Saskatchewan, Labrador, Nunavut, or in other places in the country?

What has been driving those decisions, and how can we encourage more uranium exploration and development in Saskatchewan and Canada?

[Pamela Schwann]

I'm going to defer this to my colleagues.

[Tammy Van Lambalgen]

I'll start.

Thank you for the question, Mr. Trost.

There are other factors involved besides regulatory efficiencies. The lack of certainty that's associated with our timelines really restricts our company's abilities to move on projects quickly. The long lead time is an impediment. More regulatory certainty, with efficiency built in, would certainly be an advantage to Canada for the dollars from our company.

The other issue we face is the cost. The rising cost of infrastructure has really made it hard for Canada to compete with other projects. We, AREVA, are currently in environmental assessment for the Midwest project, and we are also in an environmental assessment process with NIRB in Nunavut.

Both of those projects, once they get through the environmental assessment process, are facing some competitive challenges on the economics side of the project. Our costs have greatly increased over the price of uranium; even through uranium is sitting at close to $50, our costs are in excess of that.

[Gary Merasty]

To add to that, certainly we are investing in other areas of the world, but we are also still heavily investing in northern Saskatchewan. Both of our companies are very well represented in the Athabasca Basin, and we're probably the biggest spenders in that area.

In no way are we leaving the north, and the Athabasca Basin in particular. When you look at the uranium pipeline, projecting it out 20 to 25 years, you realize that you have to follow some of that pipeline.

[Tammy Van Lambalgen]

Let me add one more comment.

There also is an impediment for AREVA on the side of the non-resident ownership policy. We don't face it at the Midwest project, because we have a long-standing exemption through the only means available, which was the inability to find a Canadian-owned purchaser.

Our Nunavut project currently is 100% foreign owned, and although it's in the environmental assessment process, a development decision on that project wouldn't be made by the investors with the current policy in place.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

Do you think that if this policy had been lifted in the past you would have invested more heavily in Canada in the past several years?

[Tammy Van Lambalgen]

When we started in 1998 in renewing the Nunavut project, we had to ensure that the public was onside with the concept of uranium mining in Nunavut. Since that time, we've had favourable results, in that it is supported. Going through the environmental assessment process now would be an impediment to the positive decision.

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

I won't ask Cameco to comment on that, since you have a bit of a thing with Rio Tinto over a junior, so I'll leave you out of that one.

[Voices]

Oh, oh!

[Bradley Trost, Conservative, Saskatoon—Humboldt, SK]

My next question would be about human resource issues, about looking at some of the key positions required going forward. I can see how some of those positions could be filled relatively quickly. For general labour and things of that sort, skills can be transferred.

But looking at how you're going to ramp up, for example, in engineers, you just can't train a professional engineer in two years, even if you start with someone in the university process. By the time they get their P.Eng. and designation with APEGS or some other organization like that, you're talking about eight, nine, ten, fifteen, or twenty years through the pipeline to get the people you want.

What are the strategies your companies are going to use to get some of these highly technical people who take many years to train? What can the government do to help you in that?

[Pamela Schwann]

I might start off answering that question and then ask whether Tammy and Gary have any further comments.

Certainly I think we need to be more innovative. Other jurisdictions in the world are looking at remote mining. Let's use the example of Saskatoon to one of the northern mining sites. It's being tested now. It's possible.

Those are some ways.

Also, there are some tangible things happening right now. For example, at SIAST, which is the Saskatchewan Institute of Applied Science and Technology, they are looking at starting a mining technologist program in 2012. Those graduates will not have the ability to do everything a mining engineer does, but they will be able to do many of the things that currently a mining engineer does. So working more in a team kind of approach with a P.Eng., technicians, and technologists is another approach.

In terms of what the governments could do, programs like ASEP are very important in making sure that first nations and Métis students are entering the workforce. Programs like that are very helpful. Other programs that are piloted by the Mining Industry Human Resources Council, such as accreditation for certain jobs, are very good pilot programs that could be expanded.

Gary alluded to some of the challenges in the K to 12 system in terms of the quantity and quality of graduates. We need to look at some programs that would make for more effective K to 12 education, so that students in those programs are encouraged to stay in school and have access to relevant programing.

There is a program that Cameco has invested in, Credenda, which is a virtual online learning program whereby students have access to math and science programs online from all over the province that are streamed up north to give students better access. Many of the teachers in northern Saskatchewan may not have the appropriate math or science background to be teaching the courses that are necessary.

Those are some of the things that could be supported.

[The Chair, Conservative, Leon Benoit]

Thank you very much.

Thank you, Mr. Trost.

Mr. Harris, you have up to five minutes.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

Thank you very much.

I want to stay on that subject with Mr. Merasty.

You gave us some numbers earlier about first nations employment and training. Is Cameco the only company that's actively engaged in the training and skills upgrading program for first nations and Métis?

[Gary Merasty]

No, we work very closely with AREVA in northern Saskatchewan and with some of the other mining companies. You have to take a bit of an economy-of-scale approach to leverage some of the training opportunities.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

How long has this program been going on?

[Gary Merasty]

The program was a four-year program. It wraps up in March 2012. There is no other program out of ASEP, because ASEP itself is being wound down. The federal government is looking at introducing some other initiatives. One is targeted at mining, education, and training, so we are gearing up with AREVA to look at submitting a proposal and keeping this very valuable initiative going.

[Dick Harris, Conservative, Cariboo—Prince George, BC]

I imagine that in northern Saskatchewan, prior to the mining companies' being involved in programs like this, or actively having programs under which they're hiring Métis and first nations in particular for their mine sites, jobs could have been fairly scarce up there, particularly for first nations and Métis.

I don't know how many years you can go back to when there was no program like this in existence, to now, and then come up with a number of how many first nations and Métis are actually working in the mining industry now. Of that number, how many, for example, are working as mine labourers, and how many are working in more skilled positions that they've been trained for?

Also, in the short time remaining, have you been able to see a real impact in the quality of life among first nations communities as a result of these new job opportunities within the mining industry?

I think we have 20 minutes, don't we? Go ahead.

[The Chair, Conservative, Leon Benoit]

You have three minutes to answer.

[Gary Merasty]

I'll condense the twenty minutes into two.

I grew up in northern Saskatchewan in a community called Pelican Narrows. My family were fishermen and trappers. That was the primary mode of employment and socio-economic activity. There wasn't a lot of mining. There was some in the very far north with the original uranium mining, but aside from that and forestry, it was living off the land.

Also, having been a teacher, that being my first training, I know that the impacts of development have been positive. Now, there are always concerns, and you have to mitigate those concerns about the impact on the environment, about the social impacts, and about all those other impacts that we talk about and study and look at.

But in the last number of years, we have undertaken a study with an economist from the U of S and have determined through that piece of work that, between Cameco and AREVA, one out of every twenty aboriginal jobs in Saskatchewan is with our companies. We know that there's a two-for effect: every time we hire a northern aboriginal person, another position is created somewhere in the north. Also, there is another position created in the south because they go and buy their trucks, flat screen TVs, and other things in the south.

We know that in the next little while it's going to be a challenge to sustain our 50% aboriginal employment number. We're only seeing about 100 to 125 grade 12 graduates a year. Next year we have to hire about 430 people. If you extrapolate that 10 years, we're going to have a major shortage. The last thing we want--and the first nation and Métis communities have told us that it's the last thing they want--is to be left behind. So the training programs that we just talked about are absolutely critical, starting in the K to 12 system and moving on to the college and university level.

As a bit of a response to MP Trost's question, engineering is one of those positions we'd like to get and simply get it started. We are seeing another 20 to 30 years of activity in the mining industry, so let's just get started. We view the aboriginal community as a competitive advantage.

[A voice]

Let me add that—

[The Chair, Conservative, Leon Benoit]

Actually, we're out of time for Mr. Harris. You may get a chance in response to another question later.

Monsieur Lapointe, you have up to five minutes.

Go ahead, please.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Chair.

I'd like to talk a bit more with Mr. Lapointe.

If we had 3% of the gross value, instead of collecting more or less $700 million for the state's coffers, how much would have been collected, more or less, in your opinion, if this had already been in place two or three years ago?

[Ugo Lapointe]

It must be understood that we're talking about improving the current regime with the minimum of the gross value. So we can easily get, for last year, for example, $200 million or $300 million more.

We also say that a range of 3 to 8% should be considered. This is one example, that of Australia. This range would be pegged to the price of metals. For example, right now, the price of gold is over $1,500 an ounce. So we would see an increase in the range.

Here's a concrete example, namely the Éléonore gold mining project belonging to the Goldcorp company in northern Quebec. When Goldcorp purchased the deposit from the company Mines d'Or Virginia, the latter kept a sliding scale royalty, which could rise up to 3.5% if the price of gold went beyond a certain threshold. The concept of a sliding scale depending on price trends is also important.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you.

You also noted that it would be important that both levels of government provide a little more financial support for following up on environmental impacts. It was in a section that you presented in English. Could you tell us more and explain to us how financial assistance could help minimize certain environmental consequences?